In a destination-based state, sales tax is collected based on the buyer’s location. That means you collect sales tax based on your customer’s state and local tax rates. You also remit the tax to your customer’s state and locality.
To edit this, head to your “Program Options” screen. Click on “Tools” and “Program Options.”
Click on the “Business and Financial Settings” section. Open “Sales Tax Settings.”
Click on “Sales Tax Rates.”
In the “Destination-Based Tax for These States” section, enter the state abbreviation that you want to include. Separate multiple states by commas.
To see this in action, let’s look at an example on the Sales Screen. Let’s say we added the state of New York to our Destination-Based tax list.
If we head to the shipping tab and select New York for the state, we’ll notice the tax rate has updated in the lower right corner.
You can also select the tax type from the “Tax” dropdown. Notice how it changes for each state.
New York selected: